The UK’s competition regulator said on Wednesday it would start an investigation into Nvidia Corp’s $40 billion agreement to buy UK-based chip designer Arm Holdings.
Nvidia, the largest American chip firm by market capitalisation, struck a deal with Japan’s SoftBank Group in September to buy Arm.
That has raised concerns about the possible impact on Arm’s long-standing standing as a so-called neutral supplier, whose chip technology is utilized by a variety of consumers.
Arm supplies intellectual property into Apple, Qualcomm and a plethora of other people for chips that power almost all the world’s smartphones.
Nvidia has vowed to retain Arm’s open-licensing model and keep the consumer neutrality that it said had been one of the bases of its own success, both as an independent company and under SoftBank possession.
It’ll install “firewalls” to make sure it does not access confidential data from Arm’s customers, some of which would be its rivals, or have early access to Arm’s goods, a top Arm executive has told journalists at our partner news agency Reuters.
The British government has also been scrutinising the deal, including obligations from Nvidia to keep Arm’s head office and employees in Cambridge, eastern England. It might chose to intervene on grounds like public interest or national security.
Nvidia’s pledges replicate the promises made by SoftBank in 2016, which helped convince the British authorities then to allow the takeover of the country’s top tech company.
“The regulatory process is confidential and we won’t be providing comment on milestones along the way,” Nvidia spokesperson said, including the approval procedure will take approximately 18 months in the day the agreement was signed.
The CMA said it was encouraging views on the effects of the deal on competition before the launch of its own investigation. The first phase of a competition investigation generally takes up to 40 days, after which it can decide to move to a longer comprehensive review.
The team at Platform Executive hope you have enjoyed the ‘UK competition watchdog to probe Nvidia’s Arm takeover‘ article. Initial reporting via our official content partners at Thomson Reuters. Reporting by Pushkala Aripaka, Subrat Patnaik and Chavi Mehta in Bengaluru and Paul Sandle in London. Editing by Keith Weir, Mark Potter and Arun Koyyur.
Stay on top of the latest developments across the platform economy and gain access to our problem-solving tools, proprietary databases and content sets by becoming a member of our community. For a limited time, premium subscription plans start from just $16 per month.